heloc in collection

Guest 0.10 Dollars($)

My home was foreclosed by the 1st lender Dec 2007. It has a 1st and 2nd mortgage. I recently got a letter from a collection agency that they are collecting on behalf of the 2nd lender. Is it possible that a HELOC which is a secured loan be sold/assigned to a collection agency. Shouldn't it be that the original HELOC creditor be pursuing a deficiency judgement.
I am presuming that the lender charged it off and sold it to a collection agency. Is it legal? THanks in advance for your input.

larry · Joined: 27 Jun 2007 Posts: 2966 414.02 Dollars($)

Hi rd,

Welcome to the forum.

Even if the lender charged the debt off he can sell it to the collection agency. Charged off does not mean that the lender gas forgiven the debt. So you are liable to pay it.

Now have not you contacted with the second lender after foreclosure and tried to pay him off?

0.10 Dollars($)

Hi Rd,

I haven't heard of a mortgage been sold off to a collection agency. But what I can tell you is, because your first loan has been satisfied and the home has been foreclosed, so the second lender no longer has an interest in the property. That's the reason he is treating the Heloc as an unsecured debt and has sold it off to a collection agency.

Thanks.

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